Tuesday, 29 May 2012

Christine Lagarde. Yeah!

Proverbs 22:7

The
rich rule over the poor, and the borrower is servant to the lender.

In the charged pre-election atmosphere in
Greece, Christine Lagarde’s comments on Greek taxation have fallen like a bombshell
in the public media. They were published in an
interview with The Guardian, and hardly contribute to improving the
situation, no matter how correct she may be in essence about the need to crack
down on tax evasion. I repeat the text here: each reader can draw their own
conclusions as to what she meant to say, and what political response to her
comments is worth.

Nevertheless, while this might come as a surprise to
Greeks suffering under extreme austerity, some say Lagarde's approach to the
eurozone is less draconian than the IMF's traditional policy towards developing
world economies. Is it easier to impose harsh demands upon small economies, but
much harder to tell difficult truths to the big ones – particularly fellow
Europeans?

"No," she says firmly. "No, it's not
harder. No. Because it's the mission of the fund, and it's my job to say the
truth, whoever it is across the table. And I tell you something: it's
sometimes harder to tell the government of low-income countries, where people
live on $3,000, $4,000 or $5,000 per capita per year, to actually strengthen
the budget and reduce the deficit. Because I know what it means in terms of
welfare programmes and support for the poor. It has much bigger
ramifications."

So when she studies the Greek balance sheet and demands
measures she knows may mean women won't have access to a midwife when they give
birth, and patients won't get life-saving drugs, and the elderly will die alone
for lack of care – does she block all of that out and just look at the sums?

"No, I think more of the little kids from a school in
a little village in Niger who get teaching two hours a day, sharing one chair
for three of them, and who are very keen to get an education. I have them
in my mind all the time. Because I think they need even more help than the
people in Athens." She breaks off for a pointedly meaningful pause, before
leaning forward.

"Do you know what? As far as Athens is concerned, I
also think about all those people who are trying to escape tax all the time.
All these people in Greece who are trying to escape tax."

Even more than she thinks about all those now struggling
to survive without jobs or public services? "I think of them equally. And
I think they should also help themselves collectively." How? "By all
paying their tax. Yeah."

It sounds as if she's essentially saying to the Greeks and
others in Europe, you've had a nice time and now it's payback time.

"That's right." She nods calmly.
"Yeah."

And what about their children, who can't conceivably be
held responsible? "Well, hey, parents are responsible, right? So parents
have to pay their tax."

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